Is nuclear power the energy of yesterday?

Nuclear power is back in the headlines in New York. Governor Cuomo is now raising questions about the safety of the nuclear plant at Indian Point in the Hudson Valley. Meanwhile, two companies are talking about closing reactors in upstate New York.

The concern at the James A. Fitzpatrick power plant in Oswego County and at the Ginna facility near Rochester is not safety, it’s money. A growing number of nuclear power operators say they just can’t compete with other forms of low-cost electricity.

Gee whiz gives way to survival mode

When the first nuclear power plants went on line sixty years ago in the United States, it seemed like the next big thing. Nuclear operators touted atomic energy as a clean, reliable alternative to coal and oil.

In a lot of ways, nuclear power lived up to that promise. It turned out to be remarkably safe and reliable. Now that carbon pollution is a huge threat, you’d think nuclear reactors would be even more popular. They are still the biggest source of carbon-free electricity in the United States.
But right from the start, people in the nuclear industry struggled with another big problem – not safety, not environmental concerns, but cost. “Today atomic electricity costs more than conventional power,” acknowledged one nuclear power company, in an advertisement broadcast in the 1960s. “Engineers expect to break this cost barrier and become the first in America to achieve economical atomic electricity,” the industry promised. Making nuclear power economical was the holy grail, but half a century later, it just never panned out.

Plants closing, with few new nuclear reactors in the pipeline

“It would be very difficult for any company to make a decision to build a new nuclear plant,” said Mike Twomey with Entergy Nuclear. The industry is actually going in the opposite direction, closing down and dismantling reactors because they are unprofitable.

Entergy has already taken one plant off-line in Vermont. A second plant, the Fitzpatrick facility in upstate New York will go dark in 2017, and a third facility is slated to shut down two years after that. The big culprit, Twomey said, is cheap natural gas and a new generation of gas-fired power plants that have pushed the price of electricity into the basement. “Our price in 2015 was among the lowest prices that we’ve received,” he noted. “And our costs are up.”

State officials and lawmakers in Albany have proposed a package of subsidies for the Fitzpatrick nuclear power plant that could reach as high as $100 million to keep that reactor operating. So far, Entergy said that offer won’t affect their decision to close the facility.

Natural gas and renewables bump aside nuclear

Mycle Schneider, an industry analyst and a frequent critic of the nuclear industry, said competition from natural gas is only the beginning. “We are seeing really a radical shift in the competitive markets that pretty much leave nuclear power out in the rain,” he argued.
Schneider agreed the bubble of cheap gas has been a game-changer for everybody, undercutting coal power and hydro as well as nuclear. But coming behind all that natural gas, he said, is a wave of even cheaper wind and solar power.

A growing number of experts within the nuclear industry share that view. “We think that the costs of new nuclear right now are not competitive with other zero carbon technologies, renewables and storage that we see in the marketplace,” said Joe Dominguez, with a nuclear power company called Exelon. “So right now we just don’t have any plans on the board to build new reactors.”

Exelon has announced plans to shut down one existing nuclear reactor in New Jersey and says three other plants in Illinois and New York are threatened by low prices.

[Correction: NCPR initially reported that Exelon had announced plans to close all four nuclear reactors. In fact, only one is slated to close; the future of the other three is still under review by the company. We regret the error.]

Dominguez said for now, the only place where new nuclear reactors will be built is in the southern United States where there are still highly-regulated markets and big power authorities that can cover the massive cost of nuclear without facing head-to-head competition.